Consumers “shocked” to discover not all legal services providers are regulated

By Legal Futures

17 October 2010

Townsend: regulatory system must not assume public has sophisticated understanding of reserved/unreserved activities

There is widespread ignorance of the differences between legal services providers and consumers are shocked to discover not all of them are regulated, research commissioned by the Solicitors Regulation Authority (SRA) has found.

The SRA board said the findings – which sought to assess the general public’s understanding of legal service providers and regulation – has serious implications for regulators in terms of public perceptions of the differences between reserved and unreserved activities after alternative business structures (ABSs) come in next year.

The qualitative research, involving in-depth interviews with 40 people who had either accessed legal services or might do in the future, also found that people have a high level of trust in solicitors, greatly value customer service and good communications, rely heavily on personal recommendations, and prefer going to a practitioner who has a proven track record and specialises in the field.

Presenting the interim findings of the research to the SRA board meeting in London on Friday, Amrita Sood, qualitative director at GFK NOP market research, said consumers expect “all legal service providers to be appropriately skilled, qualified and regulated”. So instead of qualification, distinctions between providers are made on such things as customer service and the quality of relationships.

Ms Sood added the high level of faith in the expertise and professionalism of legal service providers has led to a very low perception of the risk that things can go wrong. There was no appreciation of legal complaints procedures and respondents have low expectations of being able to obtain redress.

Signs of legitimacy that reassure consumers of the bona fides of the provider tend to be such things as a prestigious address, a plausible website and certificates on the wall. The SRA board meeting erupted into laughter at the comments of one respondent, who said they found reassurance in “posh Englishmen with grey hair and briefcases”, a quote that Ms Sood said was typical of the responses.

When asked to rank the brand names of providers by the reassurance given, consumers say names that convey specialisation are most valued, such as “will-writer” or “conveyancer”. Similarly, names that included “solicitor” or “lawyer” rank highly.

SRA chief executive Antony Townsend said the research highlights the necessity “as we move into the new world, that we have a simple system of regulation that does not assume there is a sophisticated understanding of reserved/unreserved legal activity”.

He said the SRA will continue to pursue with the Legal Services Board the rationalisation of the regulated/unregulated divide and put more effort collectively into consumer education. “The notion that one starts deregulating wildly without all that being done strikes me as a complete nonsense,” he said.

Elsewhere in the meeting, Mr Towsend said the SRA plans at the end of next month to publish expanded guidance on the circumstances in which conditional contracts may be permissible, in order to help firms prepare for ABS launches. Firms will be helped to do “as much preparatory work as possible so they can hit the ground running on 6 October”, he said.

On the LSB’s demand that the SRA approve a rule change under which solicitors will have to inform existing clients of their right to complain to the Legal Ombudsman (LeO), Mr Townsend said he had issued the guidance with a covering letter to all firms. It explained that clients should be notified at the next “appropriate” time and stressed this should be interpreted flexibly so that an “undue burden” was not placed on firms. To date he has received no negative feedback, he said.

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